Factories in Britain and Germany suffered a sharp slowdown in September, raising fears that economic recovery is losing momentum against a backdrop of global political turmoil and the flagging eurozone economy, The Guardian reported. In the UK growth in manufacturing activity was the slowest in 17 months as demand for British goods waned at home and abroad. In Germany, long the powerhouse of the eurozone, the sector shrank for the first time in 15 months, hit by Russian sanctions over the Ukraine crisis and general malaise across the economies of the currency bloc.

The Royal Bank of Scotland said Tuesday that its outlook continues to improve as the British lender benefits from further declines in charges for bad loans, the International New York Times DealBook blog reported. The bank, which is 81 percent owned by the British government, said that it expected to “significantly outperform” its prior guidance for the 2014 fiscal year. The bank had expected to record about 1 billion pounds, or about $1.6 billion, in charges for bad loans this year. It did not provide an updated figure.

The Lloyds Banking Group said today that it had terminated the contracts of eight individuals and clawed back about £3 million in bonuses after its settlement of inquiries into the manipulation of global benchmark interest rates, the Irish Times reported. In July, Lloyds agreed to pay more than $380 million to British and US authorities to resolve investigations into the manipulation of rates, including one used to determine fees paid by Lloyds related to a £17 billion taxpayer-backed bailout during the financial crisis.

U.K. Treasury chief George Osborne said Monday that the Conservative Party would cut billions of pounds more of public spending to tackle the deficit, part of a tough-on-the-economy message the party hopes will win over voters in the 2015 general election, The Wall Street Journal reported. Mr. Osborne, who made the announcement in a speech to the center-right party's conference, is looking to draw the battle lines with the main opposition Labour Party over the economy ahead of the election in May.

The British government announced on Thursday it would increase its oversight of a broad array of financial benchmarks in the foreign exchange, fixed income and commodity markets, including making it a criminal offense for traders to manipulate them, the International New York Times DealBook blog reported.

Former board members of Barclays have been called on to give evidence to the UK’s anti-fraud agency as part of a probe into the bank’s dealings with Qatar over an emergency cash injection at the height of the financial crisis, the Financial Times reported. The Serious Fraud Office has served Section 2 notices on directors who were on the board when Barclays sought £5.8bn from Qatari investors in 2008 – enabling the bank to avoid a bailout.

Eco City Vehicles said Mercedes-Benz had terminated a financing and trading deal making the British firm the sole distributor of the Mercedes Vito model that is licensed for use as a London taxi, in the latest blow for the stricken company, Reuters reported. Its shares have been suspended since Friday when it said that its One80 subsidiary was facing potential administration, leading to "uncertainty as to the group's financial position and prospects".

Britain's budget deficit widened in August compared with a year earlier, a sign the nation's economic recovery has yet to be felt in its public finances, The Wall Street Journal reported. The Office for National Statistics said Tuesday the U.K.'s budget deficit widened to £11.6 billion ($18.95 billion) in August from £11 billion a year earlier, as higher spending, interest payments and investment offset only a small pickup in tax receipts. The U.K. economy is expected to expand 3.1% in 2014, according to a range of independent forecasts compiled by the U.K.

Banks, insurers and other finan­cial services firms operating across Europe face extra hundreds of mil­lions of pounds of extra tax costs, following a European Court of Justice (ECJ) ruling yesterday, City A.M. reported. The ruling means services supplied between a group’s headquarters and its branches may now be subject to VAT. Until now, services such as IT and call centre operations provided to a bank from foreign office were not charged the 20 per cent tax, as they were deemed to be within the same “VAT group”.

John Caudwell, the outspoken founder of Phones 4U, has called for the markets regulator to investigate whether the “bully boy” mobile phone industry acted in collusion to cause the demise of the high street retailer on Monday, the Financial Times reported. Phones 4U’s collapse into administration has put the jobs of almost 6,000 people and the future of 550 UK stores at risk – making it the largest retail failure on Britain’s high streets since the demise of Comet in 2012.